This chapter explores the antioxidant and prooxidant properties of cerium oxide nanocrystals (CeO2-x) and their interaction with reactive oxygen species (ROS). Since their discovery as self-regenerating antioxidants, CeO2-x nanocrystals have been shown to mimic the activity of natural enzymes, including superoxide dismutase and catalase, thereby regulating intracellular redox balance. The chapter reviews mechanisms proposed for their unusual activity, including roles of oxygen vacancies, Ce3+/Ce4+ redox cycling, partial dissolution, and Ce3+-V0-Ce3+ complexes. Using luminescence spectroscopy, it is demonstrated that the 5d → 4f luminescence of Ce3+ ions serves as a sensitive probe of redox dynamics, enabling real-time monitoring of ROS decomposition and subsequent regeneration of Ce3+ content in nanocrystals. The catalytic activity of nanoceria follows Michaelis–Menten kinetics, consistent with the presence of discrete catalytic sites, most likely associated with Ce3+-V0-Ce3+ complexes. Distinct behaviors are revealed for different ROS (H2O2, ClO−, O2•-, and •OH), for which dopant-induced defect engineering can modulate antioxidant or prooxidant effects. Notably, high oxidant concentrations can induce long-term oscillations in the Ce3+/Ce4+ ratio, reminiscent of non-equilibrium chemical oscillations. The results highlight both the biomedical potential and mechanistic complexity of CeO2-x nanocrystals as nanozymes, providing insights into their application in oxidative stress-related diseases and redox-based nanomedicine.